The Australian Dollar rallied as expected after putting in a bullish Piercing Line candlestick pattern. Prices are now testing resistance at 0.8918, the intersection of the 23.6% Fibonacci retracement and a formerly broken rising trend line. A break upward initially targets the 38.2% level at 0.9079. Alternatively, a reversal below the 14.6% Fib at 0.8819 aims for the January 24 low at 0.8659.

Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, a short trade seems premature absent a clear-cut reversal signal. We will remain on the sidelines for the time being, waiting for an actionable setup to present itself.